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| This (slowdown) is perhaps one of the worst times' Printed From: The Equity Desk Category: Economy, Markets and commodities Forum Name: Indian Economy - Powering Ahead! Forum Discription: Talk about various facets of the Indian economy, it could relate to GDP growth, inflation, fiscal deficit, disinvestments.Is India at the crux of becoming an economic SUPERPOWER? URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2123 Printed Date: 04/May/2025 at 4:05pm Topic: This (slowdown) is perhaps one of the worst times' Posted By: valueman Subject: This (slowdown) is perhaps one of the worst times' Date Posted: 16/Apr/2009 at 6:18pm
file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Infosys Technologies admits it is being affected by the global
economic recession. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - For 2009-10, the company, for the first time, said it expected a drop in
earnings per share. And, for the first time, it is giving no promise
('guidance') on hiring. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Your Q1 guidance paints a gloomy picture. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - The amount of uncertainty is unprecedented. This is perhaps one of the worst
times we have seen in our lifetime. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - However, under the given conditions, we performed quite well last financial
year. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Are there any signs of recovery? file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - The data are unclear. Our clients still believe there will be decline in
spending and in IT budgets. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - - It is uncertain at this point. What we are seeing now is a challenging first
quarter. Beyond that may be some recovery. Do lower (client) budgets imply
higher pricing pressure? file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Not necessarily. It means the number of projects that take off will be
fewer. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Pricing is only one of the many outcomes -- you might have seen the fixed
price projects going up last quarter. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - That (fixed pricing) is the way before us to provide them some
flexibility in terms of lower costs while sustaining our margins. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Is the currency volatility a big challenge for you? file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - It always is. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - We can manage a steady change in currency. But we have seen an unprecedented
volatility in a very short period. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - For the company, we need to get the growth going. With growth, all problems
will be solved. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - Have there been any cancellation or postponement of deals? file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - No. But the velocity of the business has come down. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - We are not seeing any cancellation of deals. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - When a project ends, typically a new project starts. - Now,
the rate of growth is much, much lower. Decision-making is delayed. file:///C:%5CDOCUME%7E1%5Cadmin%5CLOCALS%7E1%5CTemp%5Cmsohtml1%5C01%5Cclip_filelist.xml - We have a good pipeline of deals but those are taking longer to close. |
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The scenario is similar for other IT companies as well. There is a great impetus to reduce cost at all levels. Clients are uncertain and not committing to their budgets. Everyone is talking about a recovery in 2H 09, but that probably is more wishful thinking than anything else. Companies are trimming all non-essential expenditure like travel, trainings etc to maintain margins. The next wave of business is likely to come from companies that will benefit from Obama's stimulus packages in the energy, pharma/lifesciences, electronics and new technology initiatives.
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